How To Get Started Investing In Vacation Rentals
So you want to hop on the vacation rental investment train, but aren’t sure where to start? Don’t worry, we’ve got you covered! This post will walk you through the process, and help get you started with investing in vacation rentals.
What are the benefits of Investing in Vacation Rentals?
First, let’s find out what makes vacation rentals more attractive than other types of investments.
Cash Flow
Cash flow is an additional advantage to owning real estate since you also gain equity over time while paying down your mortgage. In terms of real estate, cash flow is referred to as the profitable income received after operating expenses and mortgage payments have been deducted. Short-term rental properties are a great way to generate monthly cash flow.
Property Appreciation
Profitable vacation homes tend to be located in sought-out areas and touristy locations. Properties in these areas tend to always appreciate in value, organically, over time. Additionally, any upgrades or improvements you make to the property, to cater to your vacation guests, will also appreciate your home’s value. It’s a win-win.
Dual-Use Property
Another awesome benefit of investing in a vacation rental is the ability to use it for your own vacations! You’ll always have a place to escape to when needed, at no additional cost.
Tax Benefits
The deal sweetens with added tax benefits. Renting out your vacation property (cannot be your primary residence) for at least 15 days of the year may qualify you to write off some, or all, of your rental expenses. Vacation homeowners can take advantage of different tax deductions related to mortgage payments, property taxes, rental income, insurance premiums, and so on.
Sustainability
Vacation rentals have proven to be sustainable investments throughout recessions and the most recent pandemic. Even during a sluggish economy, people still take vacations.
Vacation rentals afford vacationers the ability to vacation in larger groups in order to split the cost of the rental, vs. having to rent multiple hotel rooms. Additionally, during a pandemic, vacation rentals offer families and groups the chance to vacation in a more private and intimate setting, reducing exposure.
Effortless Passive Income
If you choose to hire a vacation rental property management company, like JNL Smart Realty, earning from your vacation rental can truly be a hands-off experience. We handle maintenance, marketing, booking, and guest care so that you can focus on the things that matter most to you.
Steps to Get Started Investing in Vacation Rentals
Begin Researching Locations
You’ll want to do plenty of research when you start your vacation home search. Location plays a huge role in finding the right investment property. First, find the area you want to invest in, then search for the property.
When deciding on an area, you’ll want to consider things like:
- How many people visit the area (how long & how often)?
- Is the property located in a destination that people want to continually visit?
- Is there an airport nearby? Public transportation available?
- What attractions are in the region?
- What does off-season look like?
- How is crime in the area?
Personally, we’ve found great success with vacation rentals in the Destin/Miramar Beach, Florida area. Here are 7 Reasons To Own a Vacation Rental in Destin.
Get Pre-approved for Financing
Unless you’re investing with cash, you’ll want to secure your financing for the investment right away. Getting pre-approved by a lender will let sellers know you’re serious. It’s actually even better to do this step simultaneously with the first step- when you start your location research.
Crunch Numbers
As you look at possible vacation homes, you’ll want to crunch numbers to determine your potential ROI (return on investment). If you’re able to request specific reports with monthly cash flow estimates, operating expense estimates, and net income potential. At JNL Smart Realty, we can provide you with customized reports and market analyses to help you make your decision.
Negotiate The Sale
After choosing a home and making an offer, you’ll need to negotiate the sale. Having accurate estimates of the home’s vacation rental investment potential, along with insight into the local vacation rental market, will provide you with solid points to negotiate with. It’s best to hire an experienced real estate professional, who specializes in investment properties, like JNL Smart Realty.
Prepare the Rental
After the sale goes through, it’s time to prepare your rental to accommodate upcoming guests. This can be as easy as touching up paint and furnishing the property, or as extensive as renovating parts of the home and upgrading features and appliances. You may need to hire contractors or skilled professionals to assist you.
Build a Local Service Network
This is a great time to start making contacts to build your local service network. In the event of a property emergency during a guest’s stay, you’ll want to have a service network of professionals to call, such as plumbers, electricians, HVAC service, appliance repair, etc.
Market Your Property
To get the word out about your amazing vacation rental, you’ll need to market your property. Consider avenues like Airbnb, Vrbo, various social media channels, and more.
Manage Your Calendar
Determine if there are any holidays or dates that you’ll want to use your own vacation rental and block those dates out on your booking calendar. Create any specials or discounts that you want to offer throughout the year, along with any rules (minimum number of nights), and get those set in your calendar.
Begin Screening Guests
The benefit of using platforms like Airbnb and Vrbo, is that your guests will have a public history of reservations, with reviews. This helps you determine if they are a good fit for staying at your vacation home. Without these platforms, you’ll want to make sure and screen your guests before approving a reservation.
The Easiest Way to Start Investing In Vacation Rentals
By far the easiest way to start investing in vacation rentals is to call a professional and comprehensive real estate team like JNL Smart Realty, who can handle everything for you.
We offer what larger firms can’t: personalized, around-the-clock support throughout your entire wealth-building journey. We are able to devote more time and attention to your needs, and those of your tenants and guests.
JNL Smart Realty supports buyers, investors, and property owners in Florida (Miramar Beach/Destin area) and Georgia (Atlanta Metro area).
How is JNL Smart Realty Different?
We are a comprehensive real estate brokerage, specializing in full-service property management. That means we are able to handle everything for you, from the very first step.
At JNL Smart Realty, we will:
- Locate the perfect income-producing vacation property.
- Secure the financing you need.
- Crunch numbers with customized reports and analyses.
- Get the best deal possible by expertly negotiating the sale.
- Prepare the rental (we can handle entire renovations).
- Maintain and service your property.
- Market your listing to a vast audience.
- Handle all bookings, keeping your calendar full.
- Screen and care for your guests.
All that is left for you to do when working with JNL Smart Realty, is to relax and collect the passive income from your vacation rental property (automatically deposited in your account)!!
Ready to get started? Feel free to reach out anytime!
Email – Jerry@jnlsmartrealty.com
Phone – 678-975-0441